Defense Energy Supply Center: Fueling the Force
DEFENSE ENERGY SUPPLY CENTER:
Fueling the Force
The Defense Energy Support Center, DLA’s integrated materiel fuel and energy manager, is responsible for keeping the proverbial “gas in the tank” of its military clientele from supply acquisition through product point of sale.
Interview by Dawn Onley
So just what is the mission of the Defense Energy Support Center (DESC), a field activity under the Defense Logistics Agency? Patrick Dulin, the center’s acting director, explains how DESC is procuring and supplying critical petroleum to warfighters around the world.
Q: What is DESC?
A: The Defense Energy Support Center serves as the integrated materiel manager for bulk petroleum for the Department of Defense and is responsible for the acquisition, storage, distribution, quality assurance and surveillance, and accountability of these products up to the point of sale to its customsers.
Q: What quantities of fuels are normally needed to keep America’s forces trained and deployed?
A: Our annual sales for all petroleum products in fiscal year 2006 and fiscal year 2007 were approximately 132 million barrels 42 gallons per barrel=5.544 billion gallons each year. Prior to Operation Enduring Freedom and Operation Iraqi Freedom, DESC provided approximately 110 million barrels per year [4.620 billion gallons] to meet military and other authorized users’ needs.
Q: How is fuel procured and delivered world-wide?
A: DESC contracts for its fuel requirements using competitive acquisition processes consistent with procurement statutes and regulations, including the Federal Acquisition Regulation. Under the large military specification, bulk petroleum purchase programs, most of this fuel, JP5 and JP8 for aircraft and some ground vehicles, and F76 for shipboard diesels and boilers, is bought at the source refineries and delivered by contract carriers. Typical transportation vehicles under these purchase programs include ocean-going tankers, pipelines, barges, tank trucks and rail cars. DESC also acquires a number of commercial specification fuels like gasoline, diesel, heating oils, under a direct vendor delivery concept, for use at military installations. Using the direct vendor delivery concept, successful bidders are awarded contracts to acquire and deliver fuels to the using activity location. We also use a number of other purchase programs for products such as natural gas, electricity and aerospace energy products.
Q: What are the challenges in providing fuel to regions with little and sometimes no infrastructure left?
A: The challenges in these regions can include anything from supply disruption at the refineries, to transportation interruptions based on security matters, border crossing impediments, poor road infrastructure, weather restrictions and political upheaval anywhere along the distribution corridors. Particularly for Operations Enduring Freedom and Iraqi Freedom, DESC has relied heavily on our contractors to provide fuel to the end-use customers, but has also partnered with the military services to ensure the supply lines remain open.
Q: World oil prices have risen dramatically in the past several years. What affect has this had on America’s military?
A: DESC charges its customers a standard price for the fuels provided. This insulates them from the daily fluctuations that market prices would normally impose for refined fuel products. Typically the standard price is put into effect at the beginning of the fiscal year and remains in effect for that entire year. With the recent dramatic rise in petroleum prices in the commercial market over the last few years, the Department of Defense directed DESC in December to increase the standard price established in October 2007 for fiscal year 2008. The impact to the customer is increased costs in this fiscal year.
Q: Does DESC buy only from American suppliers or do you procure products globally?
A: DESC procures products to meet customer requirements on a global basis. Contractors are not limited to American suppliers.
Q: What technologies does DESC employ to track fuel procurement and delivery?
A: DESC employs a number of internal information technology tools to track the worldwide status of fuel procurements, deliveries, inventory levels and fuel transaction data.
Q: What vendors/contractors does DESC work with to accomplish its mission?
A: Under the bulk petroleum purchase programs, DESC deals with major oil companies throughout the world which includes both U.S. companies and foreign oil companies. Some of the major oil companies include British Petroleum, ExxonMobil, Shell, Kuwait Petroleum Corporation, Valero Marketing and Supply Company, Abu Dhabi National Oil Company, SK Corporation, etc. Under the direct vendor delivery programs, DESC deals with a number of smaller, local fuel distributers and providers throughout the world.
Q: When was DESC established and has its mission changed since it was formed?
A: The origin of DESC dates back to the World War II era. The organization name and mission evolved over the years until 1962 when the Defense Supply Agency, the original name for Defense Logistics Agency [DLA], was established and the name of our organization was changed to the Defense Petroleum Supply Center. In 1964, the organization’s name changed to the Defense Fuel Supply Center. In 1998, the current name—Defense Energy Support Center—was adopted in response to an expanding mission in the installation energy sector providing natural gas, electricity, utility privatization, etc. and DoD’s desire to manage energy instead of infrastructure.
Q: What is DESC’s relationship with DLA? Also, who are DESC’s customers/clients?
A: DESC is a field activity of the Defense Logistics Agency and is co-located with DLA at Fort Belvoir, Va. DESC’s customers include the Army, Navy, Air Force and Marines, and also many of the federal civilian agencies, such as the U.S. Postal Service, Department of State, Department of Interior, NASA, etc.
Q: What is DESC’s annual budget?
A: From a sales perspective, DESC net sales in fiscal year 2006 and fiscal year 2007 were nearly $12.6 billion per year. With increasing costs for energy and the resulting increased price to our customers, net sales in fiscal year 2008 are projected to top $15 billion. ♦